Financial services organizations that are ready to embrace the possibilities of open banking need the tools to do it. Some choose to build up their own open banking infrastructure, while others prefer to purchase a dedicated solution.
In this video, Karen Holmes, Open Banking Product Marketing Director at Axway, discusses some of the necessary components in an open banking solution and whether it makes more sense to buy a specialized solution or build it yourself depending on your needs.
“First off, let's just define what open banking is, what we're trying to do. The definition of open banking is securely sharing customer data with third parties, fintechs, via a common, standard API. That's what you're trying to do.
And the benefit is to your customers who can maybe have access to a centralized view of their finances, or easily secure a loan.
So, what are the components you need to actually build?
First off, you need to be discoverable by the fintech community. You need to build a developer portal or a marketplace where you can show your APIs that you've created so that they’re easily discoverable by the fintech community and easily consumed.
You’ll have the documentation, you’ll expose all your APIs in an orderly fashion… once you've done that, what are these APIs?
One of the most foundational elements of open banking is that you need a standardized API.
In North America and in the U.S., we're specifically focused on the FDX (Financial Data Exchange) as the prevailing standard. That changes two times a year, so you have to manage that and keep that current.
And there are always new security updates such as FAPI2, which they're starting to roll out.
The third leg of this is, how do you control access to your customer data? What you need is some kind of integrated consent management. So, either granting access or revoking access, you have to make sure that you're controlling the flow of this confidential data.
These components are available, and you can build that yourself. So why would you buy it instead of building it yourself?
One thing, as I mentioned earlier, is keeping current on the current FDX standard – it changes twice a year. There’s also conformance testing that they're starting to roll out, how do you adhere to that?
And then, there’s speeding time to delivery. These projects tend to languish, so how do you move up the project delivery timeline, eliminate risk...
Ultimately, it’s allowing financial services such as banks and credit unions to focus on what they do, which is taking care of their customers’ money. Do what they do best, not focusing on IT or managing their technology.”
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